Insurance

Fairfax reports “very strong” underwriting result

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Fairfax Financial Holdings has reported its results for the second quarter of 2021, which it described as “very strong”.

The insurer posted net earnings of $1,201.4 million ($43.25 net earnings per diluted share after payment of preferred share dividends) for Q2 2021. By comparison, it posted net earnings of $434.9 million ($15.26 net earnings per diluted share after payment of preferred share dividends) in Q2 2020.

“In the second quarter of 2021, all of our major insurance companies achieved a combined ratio well below 100%, with Northbridge and Zenith National leading the way at 84.7% and 92.7% respectively. Our consolidated combined ratio of 94.3% in the second quarter of 2021 included catastrophe losses of $138.4 million or 3.5 combined ratio points,” said Fairfax Financial chairman and CEO Prem Watsa.

Watsa added that core underwriting performance continued to be “very strong” for Fairfax during the second quarter, with gross premiums written growth of 27.1% and operating income increasing to $398.3 million – both of which reflect greatly reduced COVID-19 losses.

“Our investments increased significantly with net gains on investments of $1,290.2 million,” the CEO added.

Ending the quarter with approximately $1.5 billion in cash and investments in the holding company, Watsa noted that the company will “continue to focus on being soundly financed.”

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